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On the Shoulders of W. Arthur Lewis: In Commemoration of the 60th Anniversary of the Lewis Model

work, Entrepreneurship, and finance

This year, 2014, marks the 60th anniversary of the publication of Sir W. Arthur Lewis’s groundbreaking paper entitled “Economic Development with Unlimited Supplies of Labour”. Compared with most papers written to celebrate Lewis’s 1954 paper, which put their emphases on assessments of Lewis’s achievements, this one proposes new research to advance Lewis’s studies of the transfer of labor from agriculture. I argue that perhaps the most important, if unintended, contribution Lewis made in his famous paper is his depiction of the transfer of labor from agriculture to nonagriculture because that transfer is the key phenomenon in the historical process of de-agriculturalization that began around 300 years ago and continues today. I consider that Lewis’s dualistic approach to the study of labor transfer is powerful since only his approach is compatible with an economy-wide equilibrium when sectorial productivity gaps persist. But the transfer of labor in the process of de-agriculturalization proceeds far beyond Lewis’s depiction of the transfer of surplus labor. And I contend that the concept of labor transfer is insufficient to describe and analyze the process of de-agriculturalization. Knowledge of the transfer’s speed is needed, for example, to determine the requirements for new capital and the agricultural product surplus that are required for transferring a given amount of labor from agriculture during a given period. The speed of labor transfer may qualify as a new, important question for research on the process of de-agriculturalization in the developing economies.

503wp.pdf (505.5 KB)
Jingbei Hu
Publication Date
August, 2014